Mumbai, Sept. 8 Even while India is emerging a key hub for passenger car exports, tyres have not quite managed to keep pace.
Automotive tyre exports fell 22 per cent in July to 446,418 units against 571,479 units registered in the same period last year. In fact, there has been a steady drop in exports the last few months. In the first quarter of 2009-10, exports were down 22 per cent to 1,558,393 units (2,042,428 units), according to the Automotive Tyre Manufacturers Association (ATMA).
Dr Raghupati Singhania, Chairman, ATMA, said the decline was due to intense competition from China in the overseas markets in recent years. “Besides, the ongoing global slowdown in the automobile sector has impacted exports,” he added.
Exports of passenger car tyres fell 29 per cent to 74,257 units (105,233), while those of light commercial vehicle tyres (LCVs) were down 28 per cent to 120,046 units (166,810). Truck and bus tyre exports were up, albeit marginally, to 197,137 units (191,594) while jeep tyre shipments rose 12 per cent to 686 units (610).
Overall tyre production in July was up 6 per cent at 7,768,632 units (7,343,858). Truck and bus tyre output rose 6 per cent to 1,290,274 units, while LCV tyre production was up 3 per cent at 508,979 units. Passenger car and jeep tyre production were down 3 per cent and 13 per cent at 1,480,605 units and 108,886 units respectively.
The sharp drop in exports has put manufacturers in a quandary as foreign sales account for about 15 per cent of the Rs 22,500-crore turnover of the Indian tyre industry. The aggressive strategies adopted by Chinese and Korean tyre companies have taken a heavy toll on Indian products, said an analyst.
The special incentives announced by the Government in the Foreign Trade Policy for 2009-14 are likely to open up new markets for tyre manufacturers.
The policy has increased incentives available under the Focus Markets Scheme and also added 26 new countries in the Latin America and Asia-Oceania region. At present, the scheme covers 83 countries in Africa, Central America, CIS (Commonwealth of Independent States) and Eastern Europe.
Inclusion of tyres and tubes in the Market-Linked Focus Product scheme under the new FTP opens up new markets for export in 13 countries, said Mr Singhania.
“It will provide the much-need fillip to tyre exports from India. Some countries such as Egypt, Brazil, Nigeria, South Africa, and Australia have good prospects for accelerated growth in tyre exports from India whereas other countries can also be tapped for strengthening the base of Indian tyre exports,” he added
Source : Business Line